Genesis, the cryptocurrency lender in bankruptcy, has proposed a dramatic reduction in its claim against the defunct crypto hedge fund Three Arrows Capital (3AC). Initially pegged at a staggering $1 billion, Genesis seeks court approval to scale this down to just $33 million. This bold step, part of a settlement agreement, marks a pivotal turn in the ongoing saga of crypto market upheavals.
Genesis’s legal team filed the proposal with the court on November 9. They argue that 3AC should hold an allowed general unsecured claim against Genesis for $33 million. This figure represents a mere 3.3% of the initially asserted claim. This move, if approved, would drastically change the financial landscape for both parties involved.
Settling Amidst the Storm
Moreover, Genesis aims to clear the air by relinquishing all claims to certain digital assets, specifically AVAX and NEAR tokens, in favor of 3AC. This relinquishment is part of a broader strategy to mitigate risks and costs associated with ongoing litigation. Genesis underlines this settlement as a critical step toward a smoother reorganization process under Chapter 11.
The lender emphasizes the necessity of this settlement. They state that it will pave the way for efficiently implementing their Chapter 11 reorganization plan. Additionally, it aims to eliminate the uncertainties and costs linked with extended legal battles. This strategic move comes as Genesis and 3AC grapple with the fallout from the FTX exchange collapse, an event that plunged the crypto industry into a deep bear market.
The proposed settlement is now with the United States Bankruptcy Court for the Southern District of New York. It awaits the approval of Judge Sean Lane. Creditors have until November 24 to raise objections, with a critical hearing scheduled for November 30. This decision comes as the crypto world marks one year since the FTX exchange collapse. This pivotal event significantly impacted firms like Genesis and 3AC due to their exposure to the failed platform.
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